Chapter 4

Negotiation: Strategy and Planning

Learning Objectives
 1. Understand the importance of setting goals for an
upcoming negotiation.
 2. Explore the major elements of a process for selecting a
negotiation strategy and how to execute that strategy.
 3. Gain a comprehensive set of tools for effectively
planning for an upcoming negotiation
Chapter Outline
 Introduction
 Goals
 Strategy versus Tactics
 Planning

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4.1 Introduction
 In this chapter, we discuss what negotiators should do
before opening negotiations.
 Effective strategy and planning are the most critical
precursors for achieving negotiation objectives.
 With effective planning and goal setting, most negotiators
can achieve their objectives; without them, results occur
more by chance than by negotiator effort.
 The figure below shows how the elements of the chapter
addressing what good negotiators do before the
negotiation takes place.
 These elements are related.
 Although this model suggests that the relationships
between these elements are linear—that is, goals lead to
strategy leads to planning—in fact, many parties often
begin midway in this sequence and work their way
“backward/forward” until the three steps of the
preparation process are aligned.
 Figure 4.1: Relationship between Key Steps in the
Planning Process
4.2. Goals – The Focus That Drives a Negotiation Strategy
 4.2.1. Introduction
 The first step in developing and executing a negotiation
strategy is to determine one’s goals.
 Negotiators must anticipate what goals they want to
achieve in a negotiation and focus on how to achieve
those goals.
 Effective preparation requires negotiators should specify
their goals and objectives clearly.
 This includes:
listing all goals they wish to achieve in the negotiation,
determining the priority among these goals,
identifying potential multi-goal packages, and
evaluating possible trade-offs among multiple goals.

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4.2.2. Types of goals
 Goals in a negotiation may take the following forms:
 Substantive goals (e.g., money or a specific outcome),
 Intangible goals (e.g., winning, beating the other party, or
getting a settlement at any cost), and
 Procedural goals (e.g., shaping the agenda or simply
having a voice at the table).
NB: All forms of these goals should be considered in an
effective preparation for negotiation.

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4.2.3. Direct effects of goals on choice of strategy.
 There are four important aspects to understand about how
goals affect negotiations.
1. Wishes are not goals, especially in negotiation.
 A wish is a fantasy, a hope that something might
happen; a goal is a specific, focused target that one can
realistically develop a plan to achieve.
2. Goals are often linked to the other party’s goals.
 If I could achieve my goal by myself, without the other
party, I probably wouldn’t need to negotiate.
3. There are boundaries or limits to what goals can be.
 If what we want exceeds the limits of what the other
party is capable of or willing to give, these goals cannot
be attainable.
4. Effective goals must be concrete, specific and
measurable; particularly to effectively:
 Communicate to the other party what we want;
 Understand what the other party wants;
 Determine whether an offer on the table satisfies our
goals.

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4.2.4 Indirect effects of goals on choice of
strategy.
 Short term goals vs Long term goals
 Short-term thinking affects our choice of strategy; in
developing and framing our goals, we may ignore the
present or future relationship with the other party in a
concern for achieving a substantive outcome only.
 Negotiation goals that are complex or difficult to define
may require a substantial change in the other party’s
attitude. In most cases, progress will be made
incrementally, and may depend on establishing a
relationship with the other party.
 Thus, relational goals tend to support the choice of a
collaborative or integrative strategy.
4.3 Negotiation Strategy
 4.3.1. The Meaning of Strategy
 The overall plan to achieve one’s goals in a
negotiation.
 is the pattern or plan that integrates an organization’s
major targets, policies, and action sequences into a
cohesive whole.
 the overall plan to accomplish one's goals in a
negotiation, and the action sequences that will lead to
the accomplishment of those goals.
 are vehicles for achieving negotiation goals.
4.3.2. Strategy versus Tactics
 Although the line between strategy and tactics may seem
fuzzy, the difference can be put as follow:
1. A major difference between strategy and tactics is that of
scale, perspective or immediacy.
2. Tactics are short-term, adaptive moves designed to enact
or pursue broad strategies, which in turn provide stability,
continuity, and direction for tactical behaviors.
3. Tactics are subordinate to strategy: they are structured,
directed, and driven by strategic considerations.
4. A strategy is “a careful plan or method, especially for
achieving an end.” Whereas the use of Tactics refers to
“the skill of using available means” to reach that end.
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 For example:
 Your negotiation strategy might be integrative, designed to
build and maintain a productive relationship with the other
party while using a joint problem-solving approach to the
issues.
 In pursuing this strategy, appropriate tactics include
describing your interests, using open-ended questions and
active listening to understand the others’ interests, and
inventing options for mutual gain.

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4.3.3. Strategic options
 Though the names given to each of these strategies vary
between writers, there are essentially four alternatives:
 Collaboration (integrative)/ creative compromise,
 Accommodation/concede,
 Competition/contend, and
 Avoidance.
 (NB. Compromise, aka clear-cut compromise- though
not accepted by some authors is the 5th option).
 Active engagement strategy: Collaboration, accommodation, and
competition strategies.
 Non-engagement strategy: Avoidance strategy.

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4.3.4. The active engagement strategies:
Overview
 Includes accommodation, competition, and collaboration
strategies.
 Competition is distributive win-lose bargaining.
 Collaboration is integrative or win-win negotiation.
 Accommodation is as much a win-lose strategy as
competition, although it has a decidedly different image it
involves an imbalance of outcomes, but in the opposite
direction. (“I lose, you win” as opposed to “I win, you
lose.”).
 • To stand firm on the issue and expect
Contend agreement to be reached by the other party
conceding

• To bring the negotiations to an end by

Concede agreeing with the other party

• To bring the negotiations to a close because

Avoidance/Non-negotiate you can do better elsewhere

• To split the difference between what you want and what

Compromise /Clear-Cut the other party wants so that you both get something, but
Compromise neither of you gets all that you wanted

• To find a solution which adds some value to the issues so

Collaborate that both can gain something and not at the expense of the
other party

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 There are drawbacks to these strategies if applied blindly,
thoughtlessly or inflexibly:
1) Distributive strategies tend to create “we-they” or
“superiority-inferiority” patterns, which may result in a
distortion of the other side’s contributions, as well as their
values, needs and positions.
2) If a negotiator pursues an integrative strategy without regard
to the other’s strategy, then the other may manipulate and
exploit the collaborator and take advantage of the good faith
and goodwill being demonstrated.
3) Accommodative strategies may generate a pattern of
constantly giving in to keep the other happy or to avoid a
fight.
 The most profound choice open to a negotiator is to not
negotiate at all.
 Indeed it is sometimes suggested that the first rule of good
negotiating is ‘don’t negotiate if you don’t have to’.
 This choice of walking away from the negotiation remains
an option at all times until agreement is reached.
 In route to that agreement, a negotiator has a choice of
other strategies.
 The names given to each of these strategies varies
between writers but essentially there are four.

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4.4. The Planning Process: Getting Ready to
Implement the Strategy
 Effective planning requires hard work in considering the
ten key steps for success.
 Assembling the issues,
Defining the major ranking their
Define the
issues related to importance, and
negotiating goal.
achieving the goal. defining the bargaining
mix.

Knowing your Knowing your limits,

Defining the
alternatives including a resistance
interests.
(BATNAs). point.

Analyzing and
understanding the Setting one’s own Assessing the social
other party’s goals, targets and context of negotiation.
issues, and resistance opening bids.
points.

Presenting the issues to

the other party: Fig 4.1: Steps in planning for negotiation
substance and process.
1. Defining the issues or negotiation goal.
 Usually begins with an analysis of what is to be discussed
in the negotiation.
 The number of issues in a negotiation, along with the
relationship between the negotiator and the other party, are
often the primary determinant of whether one uses a
distributive or integrative strategy.
 In any negotiation, a complete list of the issues at stake is
best derived from the following sources:
a) An analysis of all the possible issues that need to be
decided.
b) Previous experience in similar negotiations.
c) Research conducted to gather information.
d) Consultation with experts in that industry.
2. Defining the major issue related to achieving
the goal.
 The number of issues in a negotiation, together with the
relationship between the negotiator and the other party, are
often the primary determinant of whether one uses a
distributive or integrative strategy.
 Single-issue negotiations tend to dictate distributive
negotiations because the only real negotiation issue is the
price or “distribution” of that issue. In contrast, multiple-
issue negotiations lend themselves more to integrative
negotiations because parties can use processes such as
logrolling to create issue “packages” that are mutually
beneficial.
3. Assembling the issues and defining the
bargaining mix.
 The combination of lists from each side in a negotiation
determines the bargaining mix.
 There are two steps a negotiator can use to prioritize the
issues on an agenda:
 a) Determine which issues are most important and which
are less important.
 b) Determine whether the issues are linked together or are
separate.
4. Defining the interests.
 Interests may be:
 a) Substantive, that is, directly related to the focal issues
under negotiation.
 b) Process-based, that is, related to how the negotiators
behave as they negotiate.
 c) Relationship-based, that is, tied to the current or
desired future relationship between the parties.
 Interests may also be based on intangibles of negotiation.
5. Knowing your alternatives (BATNAs).
 Alternatives (i.e., best alternatives to this negotiated
agreement, or BATNAs) are other agreements negotiators
could achieve and still meet their needs.
 Alternatives are very important in both distributive and
integrative processes because they define whether the
current outcome is better than another possibility (with a
different negotiating partner).
6. Knowing your limits, including a resistance
point.
 Good preparation requires that you establish two clear
points:
 Resistance point – the place where you decide that you
should absolutely stop the negotiation rather than
continue.
 Alternatives – other agreements negotiators could achieve
and still meet their needs. Alternatives define whether the
current outcome is better than another possibility.
7. Analyze and understand the other party's goals,
issues and resistance points.
 Gathering information about the other party is also a critical
step in preparing for negotiation. Learning the other’s issues,
preferences, priorities, interests, alternatives and constraints is
almost as important as determining one’s own.
 What information does one party need about the other party in
order to prepare effectively?
 Several key pieces of background information will be of great
importance, including their:
i. Broad, overall goals and objectives.
ii. Issues and the likely bargaining mix.
iii. Interests and needs.
iv. Resistance point and alternative(s).
I. The other party's goals.
 Asking the other party to discuss their goals (either at the
table or before negotiations begin), or gathering data
about the other party prior to negotiations, are two
common ways to gather this data.
 Most importantly, we should attempt to understand
whether the other party has the same goals as we do.
III. The other party's issues and bargaining mix.
 The more the negotiator can get even a general sense of
how much the other is capable of addressing and meeting
the party’s issues or needs, and of what issues they will
bring to the bargaining table, the better we can predict
how the process is likely to unfold.

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IV. The other party's interests and needs.
 In addition to learning about the party’s major issues and resources,
we also need to get information about his or her current interests
and needs.
 This information may be obtained through a variety of approaches:
a. Conducting a preliminary interview, including a broad discussion
of what the other party would like to achieve in the upcoming
negotiations (focus on broad interests, not just issues).
b. Anticipating the other party’s interests (as if you were “in their
shoes”).
c. Asking others who know or have negotiated with the other party.
d. Reading how the other party portrays himself or herself in the
media.
V. The other party's resistance point and alternatives.
 If the other party has a strong and viable alternative, he or
she will probably be confident in negotiation, set high
objectives, and be willing to push hard for those
objectives.
 In contrast, if the other party has a weak alternative, then
she or he will be more dependent on achieving a
satisfactory agreement with you and be less likely to push
as hard.
8. Setting one's own targets and opening bids.
 After negotiators have defined the issues, assembled a
tentative agenda, and consulted others as appropriate and
necessary, the next step is to define two other key points:
a. the specific target point, where one realistically expects
to achieve a settlement, and
b. the opening bid, representing the best deal one can hope
to achieve.
a. Setting a target.
 When setting a target – there are several principles to keep
in mind:
i. Targets should be specific, difficult but achievable, and
verifiable.
ii. Target setting requires proactive thinking about one’s
own objectives.
iii. Target setting may require considering how to package
several issues and objectives.
iv. Target setting requires an understanding of trade-offs
and throwaways.
b. Setting an opening bid.
 An opening bid may be the best possible outcome, an
ideal solution, something even better than was achieved
last time.
 It is easy to get overly confident, however, and to set an
opening that is so unrealistic that the other party
immediately laughs, gets angry, or walks away before
responding.
9. Assessing the social context of a negotiation.
 When people negotiate in a professional context, there
may be more than two parties.
 a) There may be more than two negotiators at the table.
Multiple parties often lead to the formation of coalitions.
 b) Negotiators also have constituents who will evaluate
and critique them.
 c) Negotiation occurs in a context of rules – a social
system of laws, customs, common business practices,
cultural norms, and political cross-pressures.
 “Field analysis” can be used to assess all the key parties in
a negotiation.
 a) Who is, or should be, on the team on my side of the
field?
 b) Who is on the other side of the field?
 c) Who is on the sidelines and can affect the play of the
game? Who are the negotiation equivalents of owners,
managers and strategists?
 d) Who is in the stands? Who is watching the game, is
interested in it, but can only indirectly affect what happens?
 e) What is going on in the broader environment in which
the negotiation takes place?
 A number of context issues can affect negotiation:
 (1) What is the history of the relationship with the other party,
and how does it affect the overall expectations they bring to this
negotiation.
 (2) What kind of a relationship with the other party is expected or
desired for the future, and how do these expectations affect the
current negotiation.
 (3) How often do we expect to negotiate in the future?
 (4) What are the deadlines or time limits?
 (5) What are the “rules of the game” by which this agreement
will be managed?
 (6) What is common and acceptable practice in the ethical system
in which the deal is being done?
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10.Presenting issues to the other party.
 Once you have thoroughly worked your way through the
previous planning steps, the last step is to think through
the execution of your plan.
 There are two major components to consider here:

a. how you will present and frame the issues and

interests and
b. how you should structure the process by which this
information is presented.
a. Presenting and framing the issues.
 Because of the breadth and diversity of issues that can be included
in negotiations, it is not possible to specify all the procedures that
can be used to assemble information.
 There are, however, some good general guides that can be used.
 A negotiator can ask these questions:
 a) What facts support my point of view?
 b) Whom may I consult or talk with to help me elaborate or
clarify the facts?
 c) Have these issues been negotiated before by others under
similar circumstances?
 d) What is the other party’s point of view likely to be?
 e) How can I develop and present the facts so they are most
convincing?
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b. Planning the Process and Structuring the
Context by Which Information Is Presented
 When planning the process and structuring the context a negotiator
should consider a number of elements of protocol and process.
i. The agenda to follow.
 The Five major concerns to be considered in developing a
negotiation agenda:
 a) Scope: What issue should be considered?
 b) Sequence: In what order should those issues be addressed?
 c) Framing: How should the issues be presented?
 d) Packaging: Should the issues be taken one at a time, or in
various groupings/packages?
 e) Formula: Should we strive to first get an agreement on general
principles, or should we immediately begin to discuss each of the
issues?
ii. The location of negotiation.
iii. The time period of negotiation.
iv. What might be done if negotiation fails?
v. How will we keep track of what is agreed to?
vi. How can we modify the deal if necessary?
Chapter Summary

 Planning is a critically important activity in negotiation.

 As we noted at the outset, however, negotiators frequently
fail to plan for a variety of reasons.
 Effective planning allows negotiators to design a road
map that will guide them to agreement.
 While this map may frequently need to be modified and
updated as discussions with the other side proceed, and as
the world around the negotiation changes, working from
the map is far more effective than attempting to work
without it.
 We began this chapter with a basic understanding of the
concepts of strategy.
 We then discussed the importance of setting clear goals,
based on the key issues at stake.
 When negotiators are able to consider and evaluate each
of ten factors of protocol, they will know what they want
and will have a clear sense of direction on how to proceed.
 This sense of direction, and the confidence derived from
it, is a very important factor in affecting negotiating
outcomes.
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